Magnetic stripe bridge

ABSTRACT

A novel “bridge” device and accompanying methodology which link the world of the smart cards to that of the magnetic finance cards is described. This “bridge” device is called the “Magnetic Stripe Bridge” or MSB. The main function of the MSB is to interface an ordinary or “naked” smart card with just the smart chip embedded in it to a magnetic card reader for credit transaction without altering the existing card processing infrastructure. As such any smart card is effectively transformed via the use of the MSB into an ordinary magnetic finance card and admissible for use by any conventional magnetic card reader. Through the MSB and the accompanying methodology, the secure smart cards can now be deployed everywhere, both on and off the Internet, thus significantly reducing the current rampant magnetic finance card frauds and identity thefts.

TECHNICAL FIELD

The present invention is in the field of electronic devices andequipment used in the processing and/or facilitation of financial andsecurity smart card transactions (such as credit cards, debit cards,access cards etc.) using the existing magnetic card storage mediumprocessing infrastructure.

BACKGROUND

Credit cards have been in use in the US and around the world fordecades. Unauthorized or fraudulent use of credit card purchases forgoods and services has been with the credit card and financial cardindustry ever since its inception. At least in the US, the culprit hasgenerally been attributed to the use of multiple-track magnetic stripeor magstripe (typically three tracks) for storing all the pertinentpersonal and credit card account information (in tracks 1 and 2) of thecardholder. The information contained in the magnetic stripe (typicallyTrack 2 for credit cards) is not visible or readable directly from thecard except with the use of a special decoding equipment such as amagnetic stripe reader or magnetic credit card reader commonly used intoday's brick-and-mortar retail world for credit purchases of goods andservices. It is a well-known fact that the cardholders' vitalinformation stored in tracks 1 or 2 of the magnetic stripe on the backof credit cards can be easily “skimmed” or stolen. Consequently anyonecan in principle create illegally any number of these credit cards forfraudulent use and identity theft purposes. This indeed is the crux ofcredit card fraud and cardholder identity theft problems in the UStoday.

The advent of the so-called smart cards (smart credit or finance cards)first came about in Europe about three decades ago offered a lot ofhope, then and now, for solving the credit card fraud and identity theftproblems. Plastic cards are used as the carrier of microchips which canstore much more information and much more securely than the magstripescounterparts. Indeed, with the development of modern cryptographytechnology in recent years, which enabled smart cards to have a highdegree of security, the popularity of smart cards and their acceptanceas financial and banking instruments by the consumers, at least inEurope, started to grow and flourish during the past decade.

Despite a great deal of efforts in advertisement dollars and theinvestment of literally hundreds of millions of dollars in systeminfrastructure made by numerous banking associations during the pastfive years or more, most notably American Express in the rollout oftheir so-called “Blue Card” about two years ago, smart cards are simplynot making any significant headway into the US marketplace. In otherwords, only a very small fraction of the US credit card holders todayare using smart cards for credit purchases in the brick-and mortarretail world. For the very small percentage of smart card usage, most ofthem are used on the Internet.

Contrary to the situation in Europe today, where smart cards are themain stay for credit purchases for goods and banking services by thegeneral populace, the behavior of most Americans towards smart cardusage and acceptance in the US is generally considered as illogical,ridiculous (according to the Europeans) and difficult to explain.However, one can probably better understand the current smart cardsituation in the US by simply noting the fact that it took literally20-25 years before the general public in the US accepts the use of theATM (Automatic Teller Machine) cards for money withdrawal from thebanks. The Bank of America first introduced such cards to the consumersin the early 1970's and it is not until recently (starting a few yearsago) that the American public embraces this wonderful convenience.

Thus one can argue that it is the ultra-conservatism of the Americanpublic towards the acceptance of new ideas and concepts about money thatbest explains why smart cards fail to be widely accepted in the UStoday. In addition to this seemingly simple but truistic reason, thereare other economical factors that might also contribute to theirbehavior. First of all, one must not forget about the fact that thereare at present over 20 millions magnetic card readers in use in the UStoday. That represents almost $10 B worth of hardware that have to bethrown away if one were to replace them with new smart card readers.That is indeed a lot of money to be written off by the merchants fromthe economical standpoint and something not likely to happen unlessthere is an overwhelming reason for them to do so. As far as themerchants are concerned, it is not just the magnetic card readers thatthey have to replace which to them is hard-earned money. They also haveto retrain their employees to use the new smart card readers whichrepresents additional business expenses that they have to bear. That isthe reason why the merchants themselves are not enthusiastic inswitching from the magnetic cards to the smart cards. When it comes tothe question of who are influencing who between the consumers and themerchants, it is the latter that have the upper hand. It is more likelyfor the consumers to change over to use the smart cards if they find outthat their magnetic cards are no longer universally accepted by themerchants.

Finally since the American economy is the number one economy in theworld, whatever the Americans accept or not accept in financial orbusiness undertakings usually has a tremendous impact on the actions andreactions for the rest of the world. Thus the fact that Americans todaydo not embrace the use of smart cards in the US, it has an important butregressive or unfavorable impact on the rest of the global citizens andbusinesses. Case in point, when Americans travel overseas, either forbusiness or for pleasure, they only carry magnetic credit cards. Thatpretty much forces the merchants of other parts of the world to alsoequip themselves with magnetic card readers in addition to smart cardreaders. Otherwise they might stand to lose the business of thoseAmerican travelers that happen to visit their territories. As for theEuropeans, when they travel to the US either on business or forpleasure, they have to take with them magnetic credit cards otherwisethey would not be able to purchase on credit goods or services in theUS. Thus there exists an urgent need for a novel device and methodologythat can serve as a “bridge” in order to link the magnetic cards worldto that of the smart cards. In other words, the American consumers mustbest be provided with smart cards that would be compatible and useablewith the magnetic card processing infrastructure in the US. The sameholds true for world citizens other than Americans. They must also beprovided with smart cards that can be recognized for use by the magneticcard readers in the US. Of course by being able to successfully link thetwo credit card worlds, the magnetic card and the smart card can coexistuntil such time that the smart card would ultimately be the one to useby choice of technology, common sense and uniformity.

Over the past two decades, literally dozens of devices and methodologieshave been advanced and patented. They all share the common goal oftrying to drastically reduce or totally eliminate all credit card fraudsand identity thefts in those parts of the world today, including the US,where magnetic credit and debit cards, and not smart cards, are stillwidely in use for financial and credit transactions. As alluded tobriefly above, since the rampant credit card frauds and identity theftsare still very much with us in the US today, it is evident that none ofthe ideas advanced and patented to date, implemented or otherwise, havebeen working effectively at all to alleviate this situation. Inparticular, no one has ever advanced, until the present invention, theidea of taking advantage of the secured aspects of the smart card andsomehow teaming or working in tandem with it to arrive at a viableapproach to solving the credit card frauds and identity thefts problem.

Instead, almost all of these novel devices and methodologies advancedand patented to date focus only in how to modify the current magneticcredit and debit cards. New operating features have been added to themwith new processing algorithms implemented including the installation ofnew and more advanced electronic subsystems in order to render thesemagnetic credit and debit cards and/or systems fraud resistant under allmanners of conditions wherein they are used. One can categorize all theprior art in this field generally into three groups. Group one has to dowith the novel improvement, new features and configurations forstandalone cards. Group two has to do with the advancement of newmethodologies in the processing and transaction systems for financialcards. Group three has to do with the advancement of card systemshardware encompassing new technologies in electronic components, devicesand subsystems.

Examples of Group I prior art inventions relating to the novelimprovement, new features and configuration for standalone cards aredisclosed in the following patents:

U.S. Pat. No. Inventor Date 4,614,861 Parlov et al. Sep. 30, 19864,701,601 Francini et al. Oct. 20, 1987 4,786,791 Hodama Nov. 22, 19884,791,283 Burkhardt Dec. 13, 1988 4,868,376 Lessin et al. Sep. 19, 19895,130,519 Bush et. al Jul. 14, 1992 42 02 998 (German) Kreft Aug. 5,1993 5,317,636 Vizcaino May 31, 1994 5,434,398 Goldberg Jul. 18, 19955,789,732 MaMahon et al. Aug. 4, 1998 5,,955,961 Wallerstain Sep. 21,1999 6,089,451 Krause Jul. 18, 2000 6,095,416 Grant et al. Aug. 1, 20006,188,309 B1 Levine Feb. 13, 2001 6,206,293 B1 Gutman et al. Mar. 27,2001 6,223,984 B1 Renner et al. May 1, 2001 6,257,486 B1 Teicher et al.Jul. 10, 2001

U.S. Pat. No. 4,614,861 issued to Parlov et al. in 1986 discloses aunitary, self-contained credit card which has the ability to verify apersonal identification number (PIN) which is entered directly into thecard by way of a keypad without the use of an outside terminal.Furthermore, a transaction identification code (TIC), which varies foreach transactional use of the credit card, is automatically generatedfor later transaction validity verification after a valid PIN is enteredand accepted by the card. While the idea of such an all-encompassingcard advanced at the time was indeed novel in its capability ofeliminating unauthorized or fraudulent use by individuals other than thecardholder, it suffers from a number of drawbacks judging from today'stechnological and utilization viewpoints. First of all, this card is toocomplex to use and too expensive to manufacture in view of number ofcomponents that need to be incorporated onto the card. Second, themicroprocessor used was not a modern-day smart chip with the level ofsecurity absolutely required by all today's card-issuing banks. Finally,the card system is incompatible with existing magnetic stripe financialcard transaction infrastructure and merchants who opt to use such asystem must invest in new and expensive equipment in order to reap thesystem benefits. Consequently, such a credit card system has notachieved a widespread level of acceptance and usage by the generalpublic.

U.S. Pat. No. 4,701,601 issued to Francini et al. in 1987 discloses anew and improved transaction card having a magnetic stripe emulatorwhich can interface with the sensor or reader head of existingtransaction terminals (magnetic card readers). A transducer means isprovided to generate a varying magnetic field that extends beyond thesurface of the transaction card. Such transducer means were claimed tobe either a thin film head or an electromagnetic coil.

For the thin film head used as the magnetic stripe emulator, nodescription nor explanation was put forth by this patent as to how thisdevice would function as a magnetic stripe emulator, not even in a verysimple language. Instead U.S. Pat. No. 4,437,130 issued to Hennessy in1984 for a device receiving multiple eight-track tape cartridges wascited as an example. But in actuality if a thin film head could somehowbe successfully implemented on the surface of the transaction card, theonly varying magnetic field that could be generated is perpendicular tothe card surface and hence useless in emulating the magnetic fieldtransitions encoded in a magnetic stripe, which is parallel to the cardsurface.

For an electromagnetic coil claimed to be usable by this patent as amagnetic stripe emulator, no description was put forth as to how thisdevice would function as such. Consequently no working transaction cardsadvanced by this patent have ever surfaced because the claims of thispatent have never been satisfactorily supported by the disclosure of aviable or demonstrable embodiment.

U.S. Pat. No. 4,786,791 issued to Hodama in 1988 discloses a data cardusing a simulator for magnetic stripes in generating a data signal. Thedata signal is generated by the use of a magnetic coil having a drivesignal provided to it by a circuit on the card which simulates themagnetic flux reversals of the magnetic stripes. This is a veryimportant prior art invention in that the inventor was the first one torecognize the fact that many different types of cards are in use todayand much equipment is installed for reading the magnetic strips on thecards. Consequently any new card, in order to be practical, shouldmaintain compatibility with the existing magnetic card equipment. As themagnetic stripe simulator, the inventor uses a coil consisting of about80 turns of wire having approximately 0.006″ diameter and wound on ahigh permeability magnetic core material such that both the core and thewindings are embedded in the card. The inventor further uses a circuitmeans for providing a drive signal having logic one and logic zero datavalues to the coil for generating a bit pattern which correctlysimulates the magnetic flux reversals encoded on the magnetic stripeprovided to the magnetic card reader.

U.S. Pat. No. 4,791,283 issued to Burkhardt in 1988 discloses a deviceand method for transferring data from a microprocessor located in atransaction card through a card reader by emulating a prerecordedmagnetic stripe on a conventional transaction card such as a credit ordebit card. Data is sequentially produced by the microprocessor withinthe card and applied to a “magnetic field generator” which producesmagnetic fields that emulate prerecorded data on a conventional stripeof a transaction card. While the “magnetic field generator” of thisinvention does not require any specially designed magnetic card readerfor data transfer, the device itself is extremely complex involvingmultiple integrating circuit processing steps for its fabrication. Theoverall cost for setting up such needed custom tooling and specialprocessing equipment together with the delicate precision processdevelopment itself is staggering. This is probably the reason why such a“magnetic field generator” has never surfaced for use in the financialcard transaction arena since its inception over 13 years ago.

U.S. Pat. No. 4,868,376 issued to Lessin et al. in 1989 discloses ageneral-purpose re-programmable intelligent transaction card. The cardincludes an alphanumeric keypad, an alphanumeric display and one or moreinput/output ports controlled by a microprocessor and programs stored ina memory associated with the microprocessor. The microprocessor isprovided with an operating system and may be programmed or re-programmedfor a specific application for a variety of applications. While the cardcan serve multiple functions, it suffers from several drawbacks thatprevent it from being widely accepted by the bank community and thegeneral public. These include its complexity in use, its innateincompatibility with the existing credit card transaction infrastructureand the resultant high cost of the card itself

U.S. Pat. No. 5,130,519 issued to Bush et al. in 1992 discloses aportable Personal Identification Number (PIN) card which allows a userto enter a PIN code at a location remote from an authorization terminal.The PIN number is entered into volatile RAM and will remain active forsome finite period of time. The PIN, along with a random number inputfrom a remote computer is processed through a code matrix containedwithin the card to generate an image of the PIN (CGPIN), which can becompared at either the authorization terminal or at a remote computer.

A German publication No. 42 02 998 (1993) discloses a plastic ‘smart’card which has a built-in coil located on the card in the positionoccupied by a magnetic strip on ordinary cards. The data contained inthe memory of the smart card may be read using an inductive couplingbetween the coil and the head. The supply to the coil is provided by theelectronic circuit chip of the smart card. The timing of the signalscorresponds to that of a magnetic strip. No details were put forth as towhat kind of a coil it is, whether it has a magnetic core, if so, whatare the characteristics of it. Also there is no disclosure as to howthis coil can inductively output the data stored in the memory of thesmart chip or what kind of circuitry will be needed to achieve such afunction. In any event, the essential teaching of this disclosure hadbeen advanced earlier in U.S. Pat. No. 4,768,791 issued to Hodama in1988.

U.S. Pat. No. 5,317,636 issued to Vizcaino in 1994 discloses a methodand apparatus for secure credit card transactions. This inventiondescribes a system apparatus used to authorize credit card transactions.This apparatus is made up of an authorization computer and a credit cardthat work in conjunction with each other to enhance the security ofcredit card transactions. More specifically, the system includes a smartcredit card that has a microprocessor, associated memories and a liuquidcrystal display. The credit card is used to produce a uniqueverification number by processing a transaction sequence number with anencryption algorithm. The verification number is then displayed in thedisplay device, and can be transmitted to the authorization computeralong with a customer identifying account number. The computer, which isused for authorizing the credit card transactions for the customers ofthe credit card issuer, uses the account number to access an accountfile for the credit cardholder. That account file has the generalaccount data for the given customer, as well as a transaction sequencenumber, which corresponds to the transaction sequence number stored inthe credit card. Additionally, the account file contains a de-encryptionalgorithm, which is complementary to the encryption algorithm of thecredit card, such that the computer can use the de-encryption algorithmtogether with the verification number to produce a computed transactionsequence number.

The computed transaction sequence number is compared with that stored inthe computer to determine whether the two numbers correspond to oneanother. If they do, then the computer will authorize the transaction,and if they do not, then the transaction will be rejected.

Both transaction sequence numbers, the one in the card and the one inthe computer, are changed by increment after the authorized transactionso that a different verification number is generated and used in theauthorization in each subsequent credit card transaction. In otherwords, the verification number used in one particular transaction willnot be useful again in a subsequent transaction.

This invention advances a viable methodology for preventing unauthorizedusage for credit card transactions. However, such a methodology hasseveral drawbacks. One drawback is that crucial information pertainingto the cardholder and the encryption algorithm are not stored in thememory of a secure microprocessor like the modern-day smart chip andconsequently they are vulnerable to electronic piracy. Another drawbackis that since the credit card number and the verification numbergenerated for each transaction are both visibly made available to themerchant so that they can be sent for authorization, once the content ofthe card is illegally obtained, it would be difficult to safeguardagainst subsequent large scale fraud. Yet another drawback is the factthat transmittal of the encrypted verification number, which is analphanumeric number comprising 14 or more characters, rather than thecommon 4-decimal-digit PIN, along with the user identifying credit cardnumber, is not compatible with existing credit card transactioninfrastructure. This represent a major roadblock for such systemmethodology to be widely accepted by the financial community.

U.S. Pat. No. 5,434,398 issued to Goldberg in 1995 discloses a “magneticsmart card” which takes advantage of the secure microprocessor of thesmart card and also renders it compatible with the existing magneticcard readers. Two specific embodiments of this invention were advanced.The first one is a standalone magnetic smart card comprising a cardbase, a power source, a secure microprocessor which generates amodulated output corresponding to pre-selected card information, aferromagnetic element embedded in the card base and arranged such that aportion of the element is positioned at a location suitable forinterfacing with a magnetic card reader, and an inductor operative toinduce in the ferromagnetic element a modulated magnetic fieldcorresponding to the modulated output generated by the embeddedmicroprocessor.

The second embodiment of Goldberg's invention provides a portable, smartmagnetic interface device for use with at least one magnetic card havinga magnetic strip. This device is equipped with a housing, a powersource, a secure microprocessor which generates an output correspondingto pre-selected card information, a slot associated with the housingsuitable for accommodating the magnetic card, and a magnetic headassociated with the slot and arranged to operatively engage the magneticstrip when the magnetic card is inserted into the slot for inputting orerasing information from the said magnetic strip.

Although inventor Goldberg (U.S. Pat. No. 5,434,398) clearly had theright idea, like inventor Hodama (U.S. Pat. No. 4,786,791) in takingadvantage of the secure smart chip to combat frauds and identity theftswhile maintaining the usage of the existing magnetic card transactionand processing infrastructure for cost and merchant acceptanceconsiderations, the teachings of this patent have several shortcomings.First, let us consider the patent's first embodiment. In the arena offinancial cards, unit card cost to the issuers is exceedingly importantand this invention's “magnetic smart card” is expensive. Second, unlikeHodama's teaching in U.S. Pat. No. 4,786,791 (1988) on how the simulatorfor the magnetic stripe should work and be implemented, inventorGoldberg's explanation in how his “inductor” operates is unclear andimprecise. Finally, even though this is a “magnetic smart card”, apartfrom the fact that it works with a conventional magnetic card reader, itdoes not work with a smart card reader. As for the second embodiment putforth by the inventor, there is no perceived advantage over the firstembodiment. The portable, smart, magnetic interface device is equallycostly if not more so than the standalone “magnetic smart card”.

U.S. Pat. No. 5,789,732 issued to McMahon et al. in 1998 discloses aconsumer data device of a plastic encased, credit-card sized casecontaining a memory for data and transaction retention, an LCD displayfor displaying information, an LCD display for bar-codes to be read by abar-code scanner, a controller to scroll through stored information, anda data communication link via spread-spectrum RF or direct electricalcontact to a host computer. Although many of the elements advanced bythis invention have potentials for exploitation in the design andimplementation for future financial cards, this prior art is not asuseful as others and its inclusion is primarily for the sake ofcompleteness only.

U.S. Pat. No. 5,955,961 issued to Wallerstein in 1999 discloses aprogrammable transaction card which enables accessing a selected one ofa plurality of different accounts with the same or different financialinstitutions through communication with an authorization center whileproviding important anti-fraud features. The transaction card includes akeypad for selecting a desired account and for entering optionalidentification information for the card. The transaction card generatesan account number corresponding to the selected account. The accountnumber, together with the identification information, if entered, ispresented in a form that is readable by a reader device but is notdiscernable by the human eye, e.g. by emulation of a magnetic strip oran optical pattern. After a reader device (magnetic or optical reader)reads the account number and the identification information during atransaction, the account number and the identification information aretransmitted to the authorization center for verification and access tothe selected account.

In order for this transaction card to perform all the above-mentionedchores, it has to pack away so many features and devices in the cardthat it becomes overly cumbersome and complicated to use for an averageconsumer. For example, the incorporation of the feature of being able toselect from a plurality of different accounts necessitates the use of anawkward thumb-wheel switch on the card, which is very user-unfriendly.The same applies to the situation when tonal identifying controls areadded to the card, which will certainly make the latter even morecomplicated to use. But the most significant disadvantage of thisinvention is the high cost for producing the card which is the mostcritical and sensitive criteria for card issuers to consider beforeadopting the use of any card for their customers.

On the technical side, the inventor of U.S. Pat. No. 5,585,787 did notdisclose the details how he envisions the use of an inductor coil forgenerating a time-varying magnetic field that appears to the card readeras if a conventional magnetically encoded card had been “swiped” throughthe reader head. Instead he cited the embodiment of an analog drivecircuitry described in U.S. Pat. No. 4,868,376 issued to Lessen et al.in 1989 as an example of accomplishing such a feat. However, no detailswere expounded in the cited U.S. Pat. No. 4,868,376 as to the exactnature of the coil, its magnetic properties such as its core compositionand permeability, number of winding turns per inch, length of thewinding coil etc. Furthermore no mention was made to Hodama's magneticstripe simulator (U.S. Pat. No. 4,868,376) which is clearly an importantprior art.

U.S. Pat. No. 6,089,451 issued to Krause in 2000 discloses a transactioncard system for authenticating the use of transaction cards having amagnetic stripe. The system involves the use of a card possessing anon-standard magnetic stripe. Specifically the magnetic stripe disclosedhas a coercivity approximately an order of magnitude lower than the 300oersteds value for a standard low coercivity magnetic stripe card. Thecard receives input from a user and determines if the input is valid. Ifthe user's input is valid, the card responds by enabling saidnon-standard magnetic stripe thereon. The magnetic stripe is enabled fora limited time after which it is disabled. In this patent, the inventordiscloses a transducer which can convert electrical energy supplied bythe energy source into magnetic energy which can write data to themagnetic stripe in a predetermined format. By passing just a singlecurrent through a “circuit of wire”, magnetic fields can be produced indesignated locations along the magnetic stripe so as to simulate digitaldata encoded on same.

There are two basic drawbacks in the above disclosed embodiment. First,in order to generate strong enough magnetic fields to “encode” digitaldata onto the magnetic stripe using just a single continuous wireforming a “circuit” or desired spatial pattern, a large current,typically several amperes, has to be deployed. Thus from theconsideration that only a limited capacity energy source is availableonboard the card, the standard low coercivity magnetic stripe (300oersteds) is too high for use as the magnetic storage medium for thisdisclosed embodiment. Instead, a much lower coercivity magnetic stripehaving an “ideal” coercivity of only 30 oersteds must be used. The useof such a low coercivity magnetic stripe cannot guarantee the integrityof the dynamically encoded digital data for card transaction purposes,even though it may only take a few minutes in most cases to complete atransaction. Second, the transducer disclosed can only “encode” oneparticular digital data package (equivalent to one credit card's worth)onto the non-standard magnetic stripe because the so-called “wirecircuit” or the spatial pattern of the wire is fixed and is thereforeinvariant. No details were put forth in the disclosure as to how torender this transducer capable of “encoding” different digital datapackages at different times on demand onto the non-standard magneticstripe. The only skeletal teaching was afforded as “coils of wires,multiple current carrying conductors together, printed circuits, etc.all may serve to task without deviating from the objective which is toconvert electrical energy into magnetic energy in a spatiallydistributed manner.”

U.S. Pat. No. 6,095,416 issued to Grant et al. in 2000 discloses anauthorized card, such as a credit card, having a security feature. Theauthorization card generally has two operational states, a disabledstate and an enabled state. In the disabled state, which is the defaultmode of operation, access to confidential information stored on the cardis denied. The card remains in the disabled state until a PIN code isentered on a keypad provided on the card. Once the card is enabled,access to the confidential information is permitted for a predeterminedperiod of time, after which the card reverts back to the defaultdisabled state. Such a security feature could be implemented on amagnetic card, an electronic smart card, and passive electronic card.

U.S. Pat. No. 6,188,309 B1 issued to Levine in 2001 discloses anintelligent credit card which includes a keypad for inputting numbersand other information, a processor for controlling the operation of thecredit card, a power source, and an output device for selectivelyoutputting the credit card number when the card is activated. The outputdevice is a magnetic strip. A user inputs a sequence of numbers usingthe keypad. The received sequence of numbers are compared to a storedPIN number. if the sequence of numbers matches the PIN number, the cardis activated, and the credit card number is outputted using the outputdevice.

U.S. Pat. No. 6,206,293 B1 issued to Gutman et al. in 2001 discloses amagnetically communicative card having a ferrite core extendingsubstantially the width of the card body and has a conductor woundaround the ferrite core for the entire length of the ferrite core.Embedded within the card body is a controller that controls a varyingmagnetic field emanating from the conductor to mimic a varying magneticfield produced by a conventional magnetic stripe card. Optionally, thecard includes a sensor to sense a signal intercepted by the conductorfrom a varying magnetic field emanating from another device. Thecontroller reads the sensed signal to receive communication from theother device.

U.S. Pat. No. 6,223,984 B1 issued to Renner et al. in 2001 discloses anintelligent card reader to replace existing magnetic stripe readers, barcode readers, and Wiegand effect readers without the need for expensiveretrofitting of existing computer systems which are coupled to theexisting readers. The intelligent card reader can replace theaforementioned readers and yet remain compatible with their existinginterfaces by emulating a magnetic card reader, a Wiegand effect reader,or a bar code reader.

U.S. Pat. No. 6,257,486 B1 issued to Teicher et al. in 2001 discloses asmart card, smart card reader, and system for secure entry of a secretpersonal identification number (PIN) directly into the smart card whilethe card is presented to the reader. Because the user's PIN is entereddirectly into the smart card itself, and not propagated outside thesmart card, the PIN cannot be covertly obtained through the use of acompromised reader or other device in the system. A PIN keypad on thesmart card allows user entry of the PIN, and an authentication unitwithin the smart card verifies that the PIN is correct. The readermerely supplies electrical power for the smart card to take the PINentry and perform the authentication, but does not handle the PIN itselfin any way. The reader, however, is designed to allow access to thekeypad on the smart card while the smart card is being presented. Thereader may also have a separate keypad of its own for use withconventional smart cards that lack a keypad.

Examples of Group II prior art inventions relating to advancement of newmethodologies in the processing and transaction systems for financialcards are disclosed in the following patents:

U.S. Pat. No. Inventor Date 4,650,978 Hudson et al. Mar. 17, 19875,627,355 Rahman et al. May 6, 1997 5,754,652 Wilfong May 19, 19985,844,497 Gray Dec. 1, 1998 5,917,168 Nakamura Jun. 29, 1999 6,075,861Miller II Jun. 13, 2000

U.S. Pat. No. 4,650,978 issued to Hudson et al. in 1987 discloses arather complicated “bank” cash card system for handling fund transfertransactions between a payor and a payee having a magnetic “hysteresis”security arrangement. A cash card has a magnetic stripe on which theavailable cash balance, the identification and security information arescramble-recorded. A transaction register machine reads data form thecard, carries out the transaction and records the new account balance onthe card. The modified information is restored on the card in the formof a re-scrambled code. The transaction register machine also includes amagnetic tape of the cassette type or disk for storing each transactionthereon for further processing of the information at a remote dataprocessing center the transaction register machine further includes amain keyboard on the side of the payee for displaying the cash balanceon the card. The main keyboard is responsive to the to the cardholder'skeyboard which has a slot for insertion of the card for verification byentering the correct identification number known only to the cardholder.Again, the complexity of such a system, together with its inherentincompatibility with the existing magnetic credit card transactioninfrastructure, has proved to be too much of a barrier for the system tobe widely accepted and implemented by the financial community.

U.S. Pat. No. 5,627,355 issued to Rahman et al. in 1997 discloses asecurity equipment protecting the relaying of account numbers andpersonal identification numbers (PINs) by telephonic or othercommunication link. This equipment includes a host computer and a remoteportable transaction device that interact with one another. A creditgranting institution generates an account number and a series of uniquepersonal identification numbers for each account number. thisinformation is stored in the host computer's memory and is assigned as areference series to an individual customer account number an identicalseries of numbers in the same sequence is stored in the memory of theremote device. In operation, the customer account on the host computeris activated and the host computer's memory is indexed sequentially tothe first number in the reference series. During use of the remotedevice, a unique personal identification number is added to the customeraccount number and transmitted to the host computer. There it iscompared to the account number and personal identification number in thereference series. The computer will authorize the transaction if thenumber in the stored series is identical to the number in the referenceseries; otherwise the transaction will be denied or questioned.

The method advanced in U.S. Pat. No. 5,627,355 for preventing theft ofcredit information, in particular the personal identification numbers(PINs), has a number of operational disadvantages. In this patent'steaching, the credit card number is always visible for use by anybodygetting hold of the card. This number, along with a special PIN visiblygenerated on command on the card which varies sequentially insynchronism with the issuer from transaction to transaction, must bepassed on to the credit granting institution for authorizing thetransaction. Even though the PIN is unique for each transaction, thereis nothing to prevent anyone in possession of a stolen card fromsequentially generating the right combination of the PIN and accountnumber, even though it might take some time to successfully carry out anunauthorized transaction.

Furthermore, it is operationally questionable whether or not the methodtaught in U.S. Pat. No. 5,627,355 is actually scaleable. Because thehost computer has to store so many PIN numbers (literally hundreds foreach customer alone that has multiple credit cards form differentissuers), access time and memory capacity of the host computer maybecome critical parameters in terms of whether the processing systemwill function smoothly as the number of cardholders continues to grow.The same problem might surface when occasional but unavoidable systemglitches take place due simply to too much load or demand for cardapproval or reconciliation.

U.S. Pat. No. 5,754,652 issued to Wilfong in 1998 discloses a method forsequentially encrypting the digits of a personal identification number,and an apparatus for practicing the method. According to the method, arandom number is generated and supplied to a user requesting access to asystem. The user encrypts a digit of his personal identification numberby performing a function on the random number and the digit and thenprovides the encrypted digit to a verification system. A second randomnumber is then generated, provided to the user, applied to encryptanother digit of the user's personal identification number and theninput to the verification system. The dialogue between verificationsystem and the user continues, digit by digit, until each digit of thepersonal identification number has been provided to the verificationsystem in encrypted form. The verification system then compares theencrypted input with the user's personal identification number accessedfrom memory.

U.S. Pat. No. 5,844,497 issued to Gray in 1998 discloses a method andapparatus for controlling access to at least one program on a computerby verifying data entered through a keyboard with data stored on a tokensuch as a card, while isolating the entered data from the computer. Theapparatus includes a verification device, external to the computer,which receives the entered data and compared it with data stored on thecard. The verification unit then generates a status signal indicative ofthe result of the comparison the verification device is operable in afirst mode wherein data provided to the verification unit via thekeyboard is not provided to the computer. The verification device isalso operable in a second mode, wherein at least one program on thecomputer is accessible via the keyboard when the data from the keyboardmatches the data from the card. When operating in a third mode,communications are restricted to that between the verification deviceand the computer. The verification device operates in one of the threemodes in accordance with commands from the computer.

U.S. Past. No. 5,917,168 issued to Nakamura et al. discloses a terminalfor carrying out at a private location a transaction consisting ofalteration of a token value stored in an IC card issued to a cardholdervia an on-line transaction session with an operatively compatibleterminal at a remote location. The private terminal establishes datalinks with the IC card and the remote terminal and passes secureauthentication and transaction messages between them via these datalinks, relying on the IC card and the remote terminal for messagesecurity.

U.S. Pat. No. 6,075,861 issued to Miller II in 2000 discloses an entryaccess system includes a locking mechanism enabling authorized entry ata secured entry point to a closed access area or computing device. Entryis approved in response to an interaction between an intended entrantand the entry access system that involves an interchange of multi-digitnumbers and use of ID and PINs for generation of a multi-digit checknumber to establish authenticity of a request for entry.

Examples of Group III prior art inventions relating to the advancementsof card systems hardware encompassing new technologies in electroniccomponents, devices and subsystems are disclosed in the followingpatents:

U.S. Pat. No. Inventor Date 4,742,351 Suzuki May 3, 1988 4,849,613Eisele Jul. 18, 1989 5,770,849 Novis Jun. 23, 1998 5,818,030 Reyes Oct.6, 1998 6,010,066 Itou et al. Jan. 4, 2000 6,012636 Smith Jan. 11, 2000

U.S. Pat. No. 4,742,351 issued to Suzuki in 1988 discloses an IC(integrated circuit) card system of the type in which IC cards areidentified when they are connected to an external device such as aterminal. When an IC card is inserted into an IC card terminal, the PAN(primary account number) data read out from the IC card is compared withthe decrypted PAN data for identification purposes. Then, the IC card isremoved from the terminal. The PIN data input to the IC card is comparedwith the PIN data pre-stored in the IC card the results of thecomparison are used to identify the validity of the IC card, theterminal, and the card owner.

U.S. Pat. No. 4,849,613 issued to Eisele in 1989 discloses a methodologyand equipment of an operating procedure and to a device for making anelectronically authorized determination of a matter as well as to acomputer device for implementing the operating procedure. The objectiveis the electronically authorized determination of an individual matterand the remotely authorized individual differentiation of a transactionauthentication requiring on the part of the authorized person. With theexception of the authentication concept, this prior art has very littleto do with the operation and processing of financial cards and isincluded here for the purpose of completeness.

U.S. Pat. No. 5,770,849 issued to Novis et al. in 1998 discloses a smartcard device including a portable housing with a viewing aperture and avisual image display positioned to provide an image at the aperture ofinformation contained on a smart card as well as transactions processedin response to data transmitted by a transceiver between a host databaseand the smart card device. The primary purpose of this invention is toprovide new and improved apparatus for viewing and utilizing informationstored on a smart card. This prior art is also included in the currentdisclosure for the sake of completeness.

U.S. Pat. No. 5,818,030 issued to Reyes in 1998 discloses a secure,smart credit card having the same basic dimensions of a standard creditcard. This invention provides a security system that uses the concept ofa key, which, when removed prevents unauthorized use of the card. Theso-called dual device system has tow parts. A first part is amicro-programmable central unit (CPU) in the main body. The second partis an engageable intelligent micro-memory module that functions as a keyunit and is configured to join the main body to form an engaged unithaving the general dimensions and appearance of a “smart credit-typecard.” The CPU of the main body and instructions are designed to operatein conjunction with the external intelligent micro-memory module or keyunit the key unit stores the programs and date required by the processorCPU in the main body to allow the user to operate the credit cardsystem. Although such a credit card system has the ability to helpprevent unauthorized or fraudulent use, it is unlikely that this systemwill be widely accepted in the financial community because of itsoperational complexity from the user's standpoint, and its questionablecompatibility with the prevalent credit card transaction processinginfrastructure.

U.S. Pat. No. 6,010,066 issued to Itou et al. in 2000 discloses aportable terminal device in which electronic money IC (integratedcircuit) cards storing electronic monetary information are inserted, andwith which the electronic monetary information can be read out and/orwritten into the cards. One of the primary objects is to provide aportable terminal device for electronic money IC cards, hithertounavailable, into which at least two electronic money IC cards can beinserted and with which monetary data of them can be transferred toand/or exchanged with each other.

U.S. Pat. No. 6,012,636 issued to Smith in 2000 discloses a multipleapplication card data system comprising a data management device and auser card (a dual component system). This credit card system is, bydesign, complicated. A user can carry a single card that may be modifiedat will to be, in effect, a clone for any one of the user's providerdata cards, through the use of a companion data management device thatcan store data from a plurality of provider data cards. However, thesystem requires a user's interaction in order to transfer data from thedata management device to the user card. In addition, the datamanagement device also stores a digital data representation of theuser's fingerprint for verifying the user's identity when compared withan actual scanning of the user's fingerprint image by the same deviceduring the process of authentication. Thus, the user's identificationverification is by no means a simple procedure. Furthermore, the usercard itself comprises two memories for storing data the first memorystores data issued by a service provider and the second memory stores aset of data unique to the user. Before the user's scanned fingerprintimage can be used for identification purposes, the data managementdevice must first verify the data contents of the two memories residenton the user card without even raising the issue of the questionablepublic acceptance today with regards to using fingerprint imaging as aform of personal identity, the procedures the card user must endure inorder to safeguard the card's security against unauthorized use are fartoo complicated. It is believed, as advanced in the current inventionbelow, a much simpler and much less costly card system that will workjust as well against unauthorized fraudulent use identity thefts offinancial cards.

In examining and analyzing the exhaustive prior art presented above infinance cards, their transaction and processing methodologies and newequipment and subsystems, it counters one's intuition and logic toobserve that each of the prior art inventions to date addresses theoverall card security problem mostly from a very narrow point of view.Not one single prior art patent tackles the problem of today's creditcard frauds and identity thefts (at least for magnetic cards) using atotal picture approach that takes into considerations the real issuesand needs for the solution of this problem. Very simply, one candescribe the current total picture as follows. Credit card frauds andidentity thefts are still rampant today in the United States with nosign of abatement. One solution clearly has stood out for adoption overthe past several years and that is the use of smart cards in lieu of themagnetic cards. However, due to the colossal cost of replacing existingmagnetic card readers and the needed retraining of workers from thestandpoint of the merchants, and the proven slow acceptance of newmonetary device and equipment by the conservative American public (e.g.the ATM cards), the smart card solution to date has simply not beenworking. It is amply clear that a new and novel device and methodologyis urgently needed that can serve as a “bridge” to link the world of themagnetic cards to that of the smart cards. However, such a device andmethodology must afford very low unit cost cards and very low unit costaccessories (if needed). Furthermore, this novel device and method mustpossess a very high efficacy of eliminating finance card frauds andidentity thefts. They must be very simple and easy to use without anyappreciable resistance from both the merchants and the consumers.Finally, this novel device and methodology must be technically sound andhave no measurable risk in both its implementation and fast-trackadoption by the general public. The current invention in the MagneticStripe Bridge (MSB) is just one such device and methodology.

OBJECTS AND SUMMARY OF THE INVENTION

It is therefore a primary object of the present invention to provideimproved methods and systems for linking the attributes of smart cardsto those of the existing magnetic stripe card infrastructures.

A further object of the present invention is to provide a unique bridgedevice to accomplish the functional linking of ‘naked’ smart cards tothe magnetic stripe (or strip) card infrastructure to provide additionallevels of security to the linking process by virtue of a transactionnumber generator carried within the smart card.

The objective of the present invention is to take advantage of thesecured characteristics of smart cards to devise a methodology withassociated hardware that would eliminate magnetic card frauds andidentity thefts. More precisely, such a scheme acts in effect like a“bridge” that would link the world of the vulnerable magnetic financialcards with that of the secured smart cards. With the use such a“bridge”, one can take advantage of the secured attributes of the smartfinancial cards while still be able to use the existing magneticfinancial card transaction and processing infrastructure to eliminatethe need for expensive reader replacement, personnel retraining and mostof all, to be accepted by the conservative American public with minimumresistance.

Another objective of the present invention is to extend the usage ofthis “bridge” whereby other extremely sensitive and vital personalinformation such as one's medical records, names of one's physicians andnames of relatives to notify in case of emergencies, insurance policynumber etc. can be securely stored in the smart chip of the samefinancial card. This private and vital information could be madeavailable to relevant authorized individuals such as ambulance operatorsor emergency care center personnel. If the ambulances and emergency carecenters are equipped with relatively inexpensive magnetic card readersthat can read vital data from track 3 of the magnetic strip, and by apriori arrangement they have access to one's medical PIN number fortrack 3, then in the case of an emergency, one's vital medical recordscan be made readily available for use by the healthcare personnel. Incertain circumstances that could mean the difference between life anddeath for an individual.

The present invention has to do with a novel “bridge” device andmethodology that couple or link the world of the smart cards to that ofthe magnetic credit cards as discussed earlier above. As its nameimplies, this device is called the “Magnetic Stripe Bridge” or MSB Themain function of the MSB is to interface the smart card afterauthentication by same to a magnetic card reader for credit transactionand processing. As such any smart card is effectively transformed viathe use of the MSB instantly into an ordinary magnetic credit card andadmissible for use by any existing magnetic card reader.

The Magnetic Stripe Bridge is arranged as a plastic encased, credit-cardsized case. It houses an electrical power source, a microprocessor, aten or more digits alphanumeric LCD display, a 16-characters keypad, acontact pad for electrical interfacing with the smart card upon properregistration and a magnetic stripe simulator in the form of a flatmulti-turn wire-wound coil with a similarly-shaped high permeabilitymagnetic core. A card slot is located on the top right hand side of thehousing for accommodating the horizontal insertion (from right to left)of a smart card. In a preferred embodiment of the present invention, thebottom one-third of the housing (˜1.00″) is a thin section with athickness roughly the same as a conventional magnetic credit card or0.033″. The magnetic stripe simulator is centrally embedded in this thinsection and approximately 0.40″ from the bottom edge. This thin sectionarrangement for the case allows the MSB (with or without the insertedsmart card into its side) to be centrally inserted from the top into anymagnetic card reader with the magnetic stripe simulator properlyengaging the reader head.

Consider now briefly the overall operation of the MSB into transforminga regular smart card instantly into a card (magnetic) that is admissiblefor transaction and processing by a conventional magnetic card reader. Asmart card is first inserted into the MSB through a card slot located onthe right hand side of the case housing. A proper insertion willactivate via a contact switch or software provision themicroprocessor-controlled circuit inside the MSB while at the same timebring the smart card contact pad into registration with thecorresponding springy contact pad inside the MSB and thereby powering upthe smart chip of the smart card via the MSB battery.

The microprocessor inside the MSB (hereby referred to as the MMSB)initiates an ATR communication with the smart chip according to thestandard ISO 7816 protocol. After the communication is properlyestablished, the MMSB effects a “”ENTER PIN“” message on the LCD of theMSB. The smart card cardholder is requested to enter his or her 4- or6-digit PIN number using the keypad on the MSB. The MMSB thencommunicates this information to the smart chip for verification. Afterthe smart chip verifies this PIN number to be valid, it sends over tothe MMSB all the magnetic stripe track 2 data information plus a 3-digittransaction number. After that the smart card has nothing more to do andcan be pulled out of the MSB card slot for safekeeping.

Upon correctly receiving and storing all the transaction datainformation from the smart chip, the MMSB effects another message “OK 4READER” on the LCD. At this point the MSB takes over the role as the“magnetic-card-reader-admissible smart card”. The merchant or salesclerk can now treat the MSB as if it is a valid magnetic credit cardtransformed from the smart card. In one preferred embodiment of the MSB,the merchant can simply swipe the thin section of the MSB through themagnetic card reader and the transaction will be put through to theexisting magnetic card processing infrastructure for any conventionalmagnetic credit card. In another preferred embodiment of the MSB, themerchant can simply place the thin section of the MSB into the slot ofthe magnetic card reader from the top and approximately centers it inthe middle of the reader where the reader head resides. He then pushesone of the designated keys on the keypad of the MSB to begin thetransaction.

In either of the two preferred embodiments of the MSB described above,the merchant can “swipe” or “center and push button” the MSB severaltimes just like he is handling an ordinary magnetic credit card.

In the event that the smart card cardholder's PIN number is not valid,the smart chip automatically keeps account of how many consecutive timesan invalid PIN number is being tendered. Every time the smart chiprejects a tendered PIN to be invalid, that information is relayed backto the MMSB. At which point the MMSB will effect a “TRY AGAIN” messageon the LCD display. After three, illustratively, consecutive times of aninvalid PIN number being tendered to the smart chip for verification,the smart chip will no longer verify any additional PIN numbers and itwill take itself out of the service. Meanwhile the MMSB will effect a“INVALID PIN” on the LCD display and shuts itself down and leaves theLCD display blank. However, to re-activate the MSB after its shutdown,one simply has to pull out the smart card (if it is still engaged withthe MSB) and re-insert it to resume operation. If the smart card hasalready been pulled out of the MSB, one simply re-inserts the smart cardagain to achieve the same result.

One of the greatest advantage of the current invention of the MagneticStripe Bridge (MSB) and its methodology is the fact that it leaves boththe old magnetic card world and the new smart card world virtuallyundisturbed. The present invention merely serves as the vital “bridge”that links these two worlds together in order to achieve the heretoforealmost impossible task of convincing the cost-conscious merchants andthe conservative American consumers to buy in on the secure smart cardtechnology in a much shorter time frame. It is important to point outthat the cardholders themselves do not have to carry the MSB with them.Rather, it is only the merchants, if they care to do new smart cardbusiness, that need to have the MSB ready for the new smart cards usingtheir old magnetic card readers.

Even more importantly, the present invention is one that is easilyaffordable by both the card-issuing banks and the merchants. First ofall, the burden of the meager cost for the MSB (only a few US dollarswhen manufactured in millions quantity) is not borne by the issuingbanks nor by the cardholders. When the issuing banks decide to issuesmart cards in lieu of the traditional magnetic cards, the incrementalcost is relatively small, estimated to be less than US$ 0.50 per card.However, by issuing these secure smart cards, the issuing banks stand toreap huge financial benefits in fraud reduction and in the scaling downof personnel counts needed to service the growing fraud complaints fromcustomers and merchants alike.

For the cardholders, if there is no fee increase or other charges, thereis an excellent chance that they will buy in on the new smart cards justbecause they no longer have to worry about losing their cards that couldlead to frauds and identity thefts, not to mention the many new smartcard features, e.g. the storage of their own vital personal medicalrecord on the same smart card, that they now can enjoy and takeadvantage of.

From the merchants' standpoint, it is for them really a matter ofpracticing good business. For the investment they have to put up (inmost cases a handful of MSB's at a few dollars each), not only will theynot lose new smart card business, they also are in line to reap thefinancial benefits and time savings with the issuing banks because ofthe overall fraud reduction of credit cards.

We have mentioned earlier that the present invention literally willleave both the magnetic card world and the smart card world undisturbed.It is relatively easy to have a smart card mimic a conventional magneticcard. All one has to do is to have the track 1 and track 2 data for acard belonging to a particular cardholder stored in the EEPROM(Electrically Erasable Programmable Read Only Memory) of the smart chip.We mentioned earlier that after the smart chip verifies the PIN of thecardholder to be valid, it sends the track 2 data over to themicroprocessor of the MSB (MMSB) to be transmitted subsequently to themagnetic card reader for transaction processing. In addition it alsosends over a 3-digit transaction number which is automatically updatedby the smart chip every time it verifies a valid PIN number and sendsover the track 2 data belonging to the cardholder. Thus the track 2 dataprocessed for every valid transaction for the card is actually dynamic.In other words the valid credit card number of the cardholder is alwaysaccompanied by a variable 3-digit transaction code. Only the issuingbank would know the algorithm governing the updating of this transactionnumber every time the cardholder legitimately uses the card. Therefore,even though the cardholder's name and valid credit card number can beembossed on the smart card like any conventional magnetic credit card,skimming of this information from the card is insufficient to commit afraud against the cardholder because of this dynamic 3-digit transactionnumber. What we have shown here is just one embodiment example in themethodology of the present invention. Other anti-fraud schemes can beimplemented and used in coordination with the smart chip including thosecurrently used by most issuing banks.

Another equally important advantage afforded by the present invention isthe very low technological risk associated with the realization of theMSB. Unlike many prior art inventions listed and discussed above thatrequire implementing more and more components and features onto the card(magnetic or smart types alike), both the technological complexity andtheir unit production cost will correspondingly and significantly rise.But even more worrisome is the reliability issues for these cards andtheir ability to meet the stringent ISO compliance standards, both inwhether they will be able to actually meet such standards and how longit will take them to do so. For the present invention, we are dealingonly with the so-called “naked” smart cards, i.e. cards that have onlythe smart chip on them and nothing else. These “naked” smart cards havebeen reliably manufactured in millions during the past 2 decades. Theyall have no problems to date meeting the stringent ISO compliancestandards for smart cards.

As far as the MSB itself is concerned, with the exception of themagnetic stripe simulator, which has excellent demonstrable prior art,most notably U.S. Pat. No. 4,786,791 (1988) issued to Hodama, the othercomponents are routine and the complexity of the MSB unit less thesimulator likens to nothing more than just a credit-card sizedcalculator which has been produced, in the millions with extreme costeffectiveness since the 1960's. Furthermore Hodama's “magnetic stripesimulator” prior art invention has been greatly improved in efficacy andreliability by the present inventor. The prior art analog circuit fordriving the coil has been replaced with a microprocessor for achievingmore precise and more energy-efficient driving. The coil itself is nowwound with smaller diameter (0.003″) and much better insulated wire forachieving an even more compact and closer-spaced winding for the coil.As a result of these improvements to the “magnetic stripe simulator”,the MSB of the current invention can be readily produced in very largequantities and at a very low unit production cost.

Finally, another significant advantage of the present invention lies inthe fact that the MSB and the accompanying methodology not only linksthe two worlds of finance cards together in forging the smart cardforward, it also allows the usefulness of the magnetic card to expandinto new and much needed areas by exploiting the secure attribute andsuperior capability of the smart chip, and also the popularity, ubiquityand trust by most Americans in the magnetic cards. In essence, the“magnetic stripe simulator” not only can simulate track 2 data buteasily track 1 and track 3 data as well. Unlike the track 2 data whichis only numeric, data format in tracks 1 and 3 are alphanumeric. Thefact that the data density in both tracks 1 and 3 (210 bpi) is almostthree times as dense as track 2 (75 bpi) poses hardly any problem forthe brilliant “magnetic stripe simulator” prior art (U.S. Pat. No.4,786,791 issued to Hodama in 1988) and the improvements subsequentlyadvanced to it over the years (U.S. Pat. No. 5,434,398 to Goldberg in1989, U.S. Pat. No. 5,955,961 to Wallerstein in 1999 and the presentinvention).

The embodiment of the present invention is not limited to the deploymentof just one “magnetic stripe simulator” to emulate data encoded in track2 of the MSB but can be extended to any number from one to threeemulating all three tracks of a magnetic stripe. Since any data storedin the smart chip is secure, one's personal and vital medical recordscan certainly be safely stored there. These secure data can be outputtedthrough track 3 of the MSB upon entering a special medical PIN numberfor the cardholder. This medical PIN number is accessible only tocertain authorized health professionals such as the ambulance operatorsand the medical staff of emergency care centers equipped with a magnetictrack 3 reader. This is but one example to show how the magnetic cardworld can be expanded for use in other information areas when linked tothe world of the smart cards.

BRIEF DESCRIPTION OF THE DRAWINGS

These and other objects of the present invention, as well as many of theintended advantages thereof, will become more readily apparent whenreference is made to the following description taken in conjunction withthe accompanying drawings wherein:

FIGS. 1A, 1B and 1C depict front, back and side elevations,respectively, of a ‘naked’ smart card with only the smart chip embeddedin it;

FIGS. 2A and 2B depict a ‘Magnetic-Card-Reader-Admissible’ smart cardwith no magnetic strip on back of card;

FIGS. 3A and 3B shows schematically the physical layout for the MagneticStripe Bridge (MSB) according to the present invention;

FIG. 4 depicts a highly schematic 3-dimensional exploded composite viewof the (MSB) according to the present invention; and

FIG. 5 shows schematically the circuit layout for the (MSB).

BEST MODE FOR CARRYING OUT THE INVENTION

The present invention is a novel “bridge” device and methodology thattogether couple or link the world of the smart cards to that of themagnetic cards. Within this context, the magnetic cards world usesmagnetic finance and security cards (credit, debit and access) with thecardholder's vital account information such as name, valid accountnumber, expiration date, encrypted PIN etc. permanently encoded on oneor more tracks of the magnetic stripe fabricated on the back of thecard. A magnetic card reader is used to read out the information encodedon one or more tracks of the magnetic stripe for transaction processing.For credit cards, for example, the information needed to process credittransactions for goods or services resides on track 2. On the otherhand, the smart cards world uses the so-called smart cards with a smartIC (integrated circuit) chip embedded in each of them. The most commontype of smart cards is the “naked” kind. A “naked” smart card has onlythe smart IC chip embedded in it and nothing else. In the context of thepresent invention, the smart cards in the smart card world are of the“naked” kind. FIG. 1 depicts schematically a “naked” smart card. Itsphysical dimensions are exactly the same as those for the magnetic card,namely 3.375″ long (l) by 2.125″ wide (w) by 0.033″ thick (t).

As its name implies, the novel “bridge” device of the present inventionis called the “Magnetic Stripe Bridge” abbreviated as MSB. The mainfunction of the MSB is to interface the smart card after authenticationby same to a magnetic card reader for credit sale transaction using theexisting magnetic card processing infrastructure. As such any smart cardis effectively transformed via the use of the MSB into an ordinarymagnetic credit card and admissible for use by any existing magneticcard reader for a short predetermined time. Hence the present inventionallows a credit card issuing bank to issue smart cards in lieu ofmagnetic credit cards in order to take advantage of the smart card'ssuperior secure attributes and capabilities. FIGS. 2A and 2B depict thefront and back sides of a smart card issued by a bank to replace themagnetic credit card according to the teaching of the present invention.Like the old magnetic credit card, the name of the cardholder, the validaccount number and the expiration date can all be embossed on the smartcard with the usual issuing bank's holographic logo and the insignia ofthe credit card organization (VISA(R) or MASTERCARD(R), etc.) printed onthe front of the card. Appearing on the same side as the variousembossed characters and at a special designated location is the contactpads CP for the smart chip SC with the latter embedded underneath it.This smart card can also have a signature stripe (see FIG. 2B) on itsback side long with additional alphanumeric code numbers printed on same(not shown in FIG. 2B) for added security measures against fraud andidentity theft by the issuing bank.

FIGS. 3A and 3B show schematically the physical layout for the MSB. TheMSB has a bottom casing 10 with a thin section 12 and a thicker section14. A slot opening 16 is for the insertion of a smart card is fabricatedon one side of the bottom casing 10, that is the right hand side whenthe thin section 12 of the casing 10 is oriented downwards as shown inFIG. 3. A two-sided printed circuit board (PCB) 18 is mounted securelyin the bottom casing 10. A laminated polymer layer 20 with an opening 22for showing a 10-digit alphanumeric LCD 24 and the layout of the 16-keykeypad 26 with individual conductive buttons, of which 28 is typical, isplaced on top of bottom casing 10 to complete the packaging for the MSB.An illustrative MSB may have the overall dimensions of 3.5″ in height H,2.5″ in width W, as well as the thicknesses 0.033″ for its thin sectionT1 and 0.125″ for its thicker section T2.

FIG. 4 depicts a 3-dimensional composite view of the MSB. The bottomcasing 10 constitutes the bottom layer with the thin section 12 elevatedfrom the thicker section 14. A smart card 30 is shown fully insertedinto the right hand side slot opening 16 with a portion of the smartcard remaining on the outside. The two-sided PCB 18 constitutes the nextlayer. On the bottom side of PCB 18 are mounted respectively a magneticstripe simulator 32 in a carved out trough 34 in the thin section 12 ofthe bottom casing 10. A contact switch 36 is also mounted on the bottomside of PCB 18 to wake up the microprocessor MMSB 38 when the smart card30 is fully inserted into the slot 16 of the bottom casing 10. Finally asmart card flexible contact pad 40, a microprocessor MMSB 38 (such asMicrochip PIC16C924 or TI MSP430F135), a 10-digit alphanumeric LCD 24and a flat lithium battery 48 are also mounted on the bottom side of PCB18.

The circuit pattern layout for the 16-key keypad 26 is delineated on thetop side of PCB 18. Two contact switches 44 and 46 in line with themagnetic stripe simulator 32 are also fabricated on the top side of thePCB 18. Either one of these two contact switches 44 or 46 is used toprovide in one embodiment of the present invention the correct timingfor the MMSB 38 to transmit the track 2 data in storage to the magneticcard reader via the magnetic stripe simulator 32.

Finally the laminated polymer layer 20 with an opening 22 for allowingthe protrusion of the LCD 24 to be flush with the top surface of thislayer completes the composite structure of the MSB. The 16-key keypadbuttons, of which 28 is typical, are delineated on the top side of thislaminated layer 20 with the individual conducting pads, of which 48 istypical, for each of the keypad keys fabricated on the bottom side incorrect registration with the circuit layout for the keypad 26 on thetop surface of the PCB 18.

FIG. 5 shows in highly schematically form the circuit layout for theMSB. The microprocessor MMSB 38 is the nerve center for the MSB. Itsfirst important function is to establish communication with the smartchip residing on the smart card. In operation, when the smart card 30 isinserted fully into the side slot 16 of the MSB (see the dashed lines ofFIG. 3), the contact switch 36 is closed thereby waking up the entirecircuit of the MSB. Power is now available through the thin lithiumbattery 42 in concert with the flexible contact pad 40 to the smart chipof the smart card (see FIGS. 1 and 2). Then the MMSB 38 will initiate anAnswer-To-Reset (ATR) protocol to the smart chip according to ISO 7816standard through the RST pin of the latter. After the smart card 30responds to this signal indicating that the communication between theMMSB 38 and the smart chip of the smart card is operational, the MMSBwill effect a message “ENTER PIN” to the 10-digit alphanumeric LCDdisplay 24 to appear.

The cardholder (or user), upon seeing this instruction appearing on theLCD display 24, can now enter his or her 4- or 6-digit PIN number usingthe keypad 26. Upon receiving this PIN number, the MMSB 38 will relaythis PIN number to the smart card with the instruction to verify thevalidity of this data. In the event that this PIN number is valid, thesmart card will relay this information back to the MMSB 38 and at thesame time send over the track 2 data which is stored in the EEPROM ofthe smart chip to the MMSB 38 using its I/O pin. MMSB 38 acknowledgesthe receipt of this data and effects a message “OK 4 READER” to appearon the LCD 24. At this point the smart card 30 has played out its rolein the transaction and it can be pulled out of the side slot 16 of theMSB for safekeeping.

In the event that the PIN number is invalid, the smart card will relaythis message to the MMSB 38. MMSB 38 will acknowledge and effect amessage “TRY AGAIN” to appear on the LCD 24. The cardholder can enterhis or her PIN number again using the keypad 26. When the smart cardreceives a predetermined number of consecutive invalid PIN numbers(three, for example), it will relay this message to the MMSB 38 and atthe same time inform the latter that it will no longer verify any morePIN numbers. MMSB then effects a message “INVALID PIN” to appear on theLCD 24 and at the same time shuts itself off and blanks the LCD 24.However, to reactivate the MSB after its shutdown, one simply has topull out the smart card from the side slot 16 (if it is still engagedwith the MSB) and re-insert it to resume operation. If the smart cardhas already been pulled out of the MSB, one simply re-inserts the smartcard to achieve the same result.

When the message “OK 4 READER” appears on the LCD 24 indicative the factthat the MMSB 38 has correctly received and stored all the track 2transaction data information from the smart card, the MSB haseffectively taken over the role as the “magnetic-card-reader-admissiblesmart card”. The merchant or sales clerk can now treat the MSB as if itis a valid magnetic credit card transformed from the smart card. Thereis, however, a finite life to this condition. Time-out logic circuitrywithin the MMSB 38 establishes a predetermined duration after which themost recently stored data is purged and the MSB is returned to itsinactive, quiescent state. Intervals on the order of 3-10 minutes arecontemplated for this sunset or time-out feature. In one preferredembodiment of the MSB, the merchant can simply swipe the thin section 12(of FIG. 3) of the MSB through the magnetic card reader. Depending uponwhich direction the merchant is swiping the MSB through the magneticcard reader slot, either contact switch 44 or 46 will close. Thisclosure is processed to generate the correct timing information to theMMSB 38 to ensure that the track 2 data will be reliably transmittedover to the reader head through the use of the magnetic stripe simulator32. The transaction will then be put through to the existing magneticcard processing infrastructure like any conventional magnetic creditcard.

In an alternate preferred embodiment of the MSB, the merchant can simplyplace the thin section 12 (of FIG. 3) of the MSB into the slot of themagnetic card reader from the top and approximately center it in themiddle of the reader where the reader head is located. He then pushesone of the designated key buttons on the keypad 26 of the MSB toinitiate the process of sending the data over to the magnetic cardreader via the magnetic stripe simulator 22.

In either of the two preferred embodiments of the MSB described above,the merchant can “swipe” or “center and push button” the MSB severaltimes just like he is handling an ordinary magnetic credit card.

Finally, as discussed earlier above, the present invention of the MSBand the methodology is not limited just to transform a smart card into amagnetic-card-reader-admissible card and thereby taking full advantageof the security attributes of the smart card to significantly reducefinancial card frauds and identity thefts without having to change thecurrent magnetic card processing equipment and infrastructure. It isevident from FIGS. 3 and 5, the so-called thin section 12 of the MSB canaccommodate not just one, but three or more magnetic stripe simulatorssince the typical width of the latter is only 0.120″ and the thinsection is about 1.000″. Since any data stored in the smart chip issecure, one's personal and vital medical records can certainly be safelystored there. These secure data can be outputted for example throughtrack 3, much like the case for track 2 of the MSB upon the entering ofa special medical PIN number (as contrast to a financial PIN number) bythe cardholder or other authorized personnel. This medical PIN numbercan be arranged to be only accessible to certain authorized healthprofessionals such as operators of ambulances and the medical staff ofemergency care centers where relatively inexpensive (<$100) magnetictrack 3 readers are made available and maintained. This is but oneexample to show how the magnetic card world can be expanded for use inother information areas when linked to the world of the smart cardsthrough the use of the present invention.

Although the invention has been described in terms of a preferred andselected alternate embodiments, the invention should not be deemedlimited thereto since other embodiments and modifications will readilyoccur to one skilled on the art. It is therefore to be understood thatthe appended claims are intended to cover all such modifications as fallwithin the true spirit and scope of the invention.

What is claimed is:
 1. A method of providing an improved level ofsecurity in a system for interfacing a smart card forcredit/debit/financial transactions with a magnetic stripe card readingand processing capability, said smart card having electronic data storedtherein for enabling a user to initiate and complete a transaction whileitself remaining unaltered, said method comprising the steps of: (a)providing a magnetic stripe bridge having means for interfacing andcommunicating with said smart card, means for entering a user's PIN intosaid bridge for verification comparison with portions of said storeddata, means for producing simulated magnetic stripe signals responsivein part to data derived from said stored data; (b) upon successfulverification of said PIN with portions of said stored data, said smartcard may be removed from said bridge; (c) producing simulated magneticstripe signals only upon successful verification of said PIN withportions of said stored data; and (d) whereby said bridge alone may beused to initiate and complete a credit/debit/financial transaction byproviding said simulated magnetic stripe signals in the absence of aremoved smart card.
 2. The method of claim 1 wherein said bridge servesas a source of operating power to said smart card.
 3. The method ofclaim 1 wherein said smart card further includes a transaction numbergenerator for producing a succession of predetermined transactionnumbers for consecutive transactions and each of said successivetransaction numbers is used only once in combination with other storeddata to provide an additional level of transaction security duringinitiation and completion of said transaction.
 4. The method of claim 1including the additional step of providing an additional level ofsecurity by limiting the duration of said producing simulated magneticstripe signals to a predetermined time interval.
 5. The method of claim4 wherein said predetermined time interval is selected from the rangebetween one and fifteen minutes.
 6. A system for interfacing a smartcard for credit/debit/financial transactions with a magnetic stripe cardreading and processing capability, said smart card having dataelectronically stored thereon for enabling a user to initiate andcomplete a transaction, said system comprising: a magnetic stripe bridgehaving means for: (a) interfacing and communicating with said smartcard; (b) entering a user's PIN into said bridge for verificationcomparison with portions of said stored data; (c) displaying transactionstatus to said user; (d) producing simulated magnetic stripe signalsresponsive in part to data derived from said stored smart card data; and(e) whereby upon providing said simulated magnetic stripe signals bysaid bridge to a magnetic stripe card reader, said card remainsunaltered and said bridge alone may initiate and complete saidtransaction.
 7. The system of claim 6 wherein said simulated magneticstripe signal is produced only upon successful verification of said PINwith portions of said stored data.
 8. The system of claim 6 wherein saidinterfacing and communication means allow for mechanical and electroniccoupling, said entering means is a multiple key keypad, said displayingmeans is an LCD, and said producing means includes a substantiallyplanar magnetic field generating inductor.
 9. The system of claim 6wherein said smart card further includes a transaction number generatorfor producing a succession of predetermined transaction numbers forconsecutive transactions and each of said transaction numbers is usedonly once in combination with other stored data to provide an additionallevel of transaction security.
 10. The system of claim 6 wherein saidsmart card further includes time-out circuitry for limiting the timeduration during which said producing means is enabled thereby providinga predetermined finite interval for bridge usage to provide anadditional level of transaction security.
 11. The system of claim 6wherein said bridge is formed to have a first thicker section forhousing said interfacing, entering and displaying means and a secondthinner section for housing said producing means.
 12. The system ofclaim 6 wherein said means for displaying transaction status includesmeans for providing prompting messages to said user.
 13. A method forinterfacing a smart card for third part data access transactions with amagnetic stripe card reading and processing capability, said smart cardhaving sensitive personal plus other data stored therein for enabling auser to securely provide said sensitive data while itself remainingunaltered, said method comprising the steps of: (a) providing a magneticstripe bridge having means for interfacing and communicating with saidsmart card, means for entering a user's selected data access PIN intosaid bridge for verification comparison with portions of said otherstored data, means for producing simulated magnetic stripe signalsresponsive in part to data derived from said other stored data; (b) uponsuccessful verification of said PIN with portions of said other storeddata and transfer of selected portions of said sensitive personal data,said smart card may be removed from said bridge; (c) producing simulatedmagnetic stripe signals only upon successful verification of saidselected data access PIN with portions of said other stored data, saidsimulated magnetic stripe signals further containing selected portionsof said sensitive personal data; and (d) whereby said bridge alone maybe used to initiate and complete a secure third party data accesstransaction by providing said simulated magnetic stripe signals in theabsence of a removed smart card.
 14. The method of claim 13 wherein saidsmart card farther includes time-out circuitry for limiting the timeduration during which said producing means is enabled thereby providinga predetermined finite interval for bridge usage to provide anadditional level of security for said third party data accesstransaction.
 15. The method of claim 13 wherein said smart card furtherincludes a transaction number generator for producing a succession ofpredetermined transaction numbers for consecutive transactions and eachof said transaction numbers is used only once in combination with saidother stored data to provide an additional level of security for saidthird party data access transaction.